The government has scheduled depositions of six current
collateralized-debt obligation analysts, according to a status
report filed yesterday in federal court in Santa Ana,
California. The U.S. is also scheduling depositions of another
employee and two ex-employees, according to the joint filing.
New York-based S&P hasn’t scheduled its own depositions.

“Depositions of the financial institutions and regulators
from which it seeks discovery must necessarily follow S&P’s
receipt and review of what we expect to be very significant
document productions,” according to the filing.

The Justice Department last year accused S&P of lying about
its ratings being free of conflicts of interest and may seek as
much as $5 billion civil penalties. The government alleged in
its Feb. 4 complaint that S&P knowingly downplayed the risk on
securities before the credit crisis to win business from
investment banks seeking the highest possible ratings to help
sell the instruments.

S&P has said it will seek evidence that the lawsuit was
political retribution by the government because it was the only
ratings company to downgrade U.S. debt in 2011.

The company is scheduled to seek to compel the U.S. to hand
over internal documents about its decision to sue S&P and not
Moody’s Corp. (MCO), which S&P says gave the same ratings as it did
for residential mortgage-backed securities and CDOs backed by
those securities. A hearing on S&P’s request is scheduled for
March.

The case is U.S. v. McGraw-Hill Cos., 13-cv-00779, U.S.
District Court, Central District of California (Santa Ana).

To contact the reporter on this story:
Edvard Pettersson in Federal court in Los Angeles at